peers, my generation, all went to other cities,” he says. “Even if they stayed to go to U of M or MSU [Michigan State University], they went to Chicago or New York or LA after graduation. Nobody, nobody, stayed. It was a sort of a lost generation. And those people are starting to come back.”
There remain a lot of political hurdles in Detroit, he explains, and figuring out transportation and fire and police for the city are top priorities. But it’s happening. If nothing else, there is money flowing into the city now, more employees are coming to work downtown, for Quicken Loans or otherwise, and it’s making a noticeable difference.
Is the suburban location holding back his growth? Does he wish he had done things differently? Not necessarily. The Internet works from anywhere, suburbs included.
“I think people are rooting for Detroit,” he says. “I think Detroit gets an overly bad rap in the press, and that has people rooting for it. Detroit was really bad when I was growing up; in the eighties to maybe 2000 you’d go there for a show or a sporting event and basically that was it. It wasn’t a cool place to go. It’s way better now, and people are coming in with a fresh perspective. Yeah, it’s a little gritty, but that’s sort of cool.”
And with jobs come people.
“People will start coming here,” Epstein says, “but at the end of the day, the companies need to offer a compelling reason.”
Just beyond the Detroit suburbs, about forty-five minutes from downtown, lies the small city of Ann Arbor, home to the University of Michigan and many of the state’s traditional innovation industries. In fact, for a college town of just over 100,000 people, Ann Arbor is well connected. There’s quite a bit of venture capital in town, mostly focused on biotech and the life sciences, as well as a small but growing community of more traditional tech entrepreneurs.
Erick Bzovi and Lance Carlson cofounded HealPay Technologies in 2010 to develop online applications to support billing and collections services. Based out of a small, walk-up office in the middle of Downtown Ann Arbor, the company now has a roster of clients ranging from collections agencies to attorneys to real estate investors, anyone who can benefit from online billing tools. Bzovi and Carlson still run the operation with a staff of about five total employees.
But it ended up in the shadow of U of M almost by accident.
“Lance has been an Ann Arbor guy his whole life,” Bzovi says, “and when we got together he was like, ‘Dude, Ann Arbor is so much more techie than Detroit.’ And it is. You can go to any of these cafés around here—Starbucks or Sweetwaters—and you hear people talking about JavaScript or Ruby or cloud computing. And you don’t often hear that in Detroit. So Ann Arbor has that tech cluster feel. It’s kind of cool.”
But that doesn’t mean it’s an easy place to start a company. Having a major research university in town—particularly one as well regarded as Michigan—is theoretically great for recruitment and great for talent, but convincing a twenty-one-year-old computer science major coming out of a school like that that he’s better off staying in southeastern Michigan than trying to make his name in San Francisco or New York is almost a losing proposition. Most of these graduates feel like they can do better.
“There are so many smart kids here,” Bzovi says, “but we just have a window [to keep them around]. We had an intern who was a data scientist and we would have loved to have kept him, but he left. Ann Arbor has a window and then they leave.”
Still, HealPay is making its mark on the fledgling “fintech”—financial tech—space. They’re traveling the country to attend banking and collections conferences—“I actually got licensed as a collection agent,” Bzovi says. “It’s not something I ever wanted to do, but it helped me understand how these companies operate and how they make money”—and have recently expanded into residential billing and big data services. The goal is to help collections agencies and other clients better understand their own customers via the reams of data that HealPay processes for them.
“What we do is a business solution, and it’s actually a legit business model that makes money,” he says. “It’s not about downloads or shares or apps or whatever. Enterprise is not sexy, but in enterprise just being visible is the most important thing. You don’t need an elaborate setup.”
As in many university towns I visited across the country, the university is “sort of but not really” part of the local startup discussion. Michigan, however, is actually trying, if in no other way than by encouraging current students to consider working for a startup after graduation. The student-backed MPowered tech entrepreneurship organization, for example, hosts a startup career fair that, in 2013, attracted more than 100 small companies from all over the country and hundreds of qualified soon-to-be graduates. And that was in addition to the 1,000-plus business ideas that competed in its recent elevator pitch contest, or in what has become the world’s largest student-run hackathon.
I sat down with Scott Christopher, the president of MPowered, at Sweetwaters coffee café in Downtown Ann Arbor to learn more about the university’s interest in entrepreneurship and how Michigan students are getting involved.
“Staying in Ann Arbor is becoming a lot more likely than when I first came here,” he says, referring to his freshman year in 2010. “I remember when I was a freshman I saw a talk where the speaker said, ‘When you graduate, the school should give you a plane ticket to either the East Coast or the West Coast,’ because nobody stays in Michigan.”
But there’s been a real push in the last few years, he says, to try to get U of M students excited about the possibilities of a career in Detroit. The startup career fair is part of that, as is the army of Michigan interns that now work locally each summer.
“People are realizing that you can make a difference in Detroit,” he says. “A lot of people come to Michigan, want to get a good education, want to enjoy the big public university scene, but also want to make a difference in the world after they graduate. Detroit is the perfect place for that right now, because there’s not a lot going on there yet and there’s plenty of opportunity.”
Big talk. Big opportunities. And what is Christopher himself planning to do after graduation? He was just a junior when we met, but he had already secured a summer internship at Google, in Mountain View, California. More than 2,300 miles away from Ann Arbor.
The fact is, Detroit is still a huge city. It’s more than 140 square miles in total, encompassing dozens of distinct and contained neighborhoods, some of which are doing better than others. In the upscale Grosse Pointe area to the east of town, you can still drop $300,000 or more on a country club home. But on the west side? And to the north? In these areas there are almost more foreclosures on the books than people, and arson has become a nightly problem for the city’s fire department as abandoned buildings keep going up in flames. There’s just no one around left to care.
Homes across the city—and these are nice, large, historic structures on picturesque streets—are selling, when they sell at all, for five-figure prices and less.
To learn more about the city itself and the macro problems it is still facing, I sat down with Leslie Smith, president and CEO of TechTown, a research and technology business park and accelerator program located near the campus of Wayne State University north of Downtown Detroit. And this is the real Detroit. Her office is located in a converted General Motors research and development facility, the actual building where the original Corvette was designed, and we could see the abandoned shell of GM’s first headquarters building across the street through her window as we talked.
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